By Adam Haigh
May 6 (Bloomberg) -- European stocks gained, with the Stoxx Europe 600 Index paring its biggest weekly drop since March, as investors awaited the monthly U.S. payrolls report. Asian shares declined while U.S. futures advanced.
Royal Bank of Scotland Group Plc rallied 6.4 percent after Chief Executive Officer Stephen Hester forecast a return to profit this year. ThyssenKrupp AG soared 6.5 percent as Germany?s biggest steelmaker said it plans to sell or spin off units to reduce debt. Belgacom SA plunged 5.5 percent after cutting its forecasts.
The Stoxx 600 gained 0.2 percent to 278.38 at 12:35 p.m. in London. The gauge has declined 1.9 percent this week, on course for its biggest retreat since March 18, as commodities tumbled and U.S. economic data disappointed investors. The measure climbed 2.9 percent in April as companies from PSA Peugeot Citroen to Ericsson AB reported earnings that topped estimates and the Federal Reserve maintained its pledge to keep interest rates low for an ?extended period.?
?Economic growth is slowing,? said Bill O?Neill, chief investment officer for Europe, the Middle East and Africa at Merrill Lynch Wealth Management, where he helps manage $1.5 trillion in assets globally. We are looking for ?anything that keeps the Fed on side in terms of supporting money supply. The important thing about the jobs report is trying to get a sense of how much jobs growth has been forgone because of the effect of rising costs on margins,? he said in a Bloomberg Television interview with Francine Lacqua.
U.S., Asian Shares
Standard & Poor?s 500 Index futures gained 0.2 percent today, while the MSCI Asia Pacific Index slid 0.9 percent.
A government report at 8:30 a.m. in Washington may show employers in the world?s largest economy hired 185,000 additional workers in April, compared with 216,000 in March, according to a Bloomberg survey of economists. Applications for jobless benefits unexpectedly jumped by 43,000 to 474,000 last week, U.S. Labor Department figures showed yesterday.
Of the 216 companies in the Stoxx 600 that have reported earnings since April 11, 128 have beaten analyst forecasts for per-share profit, according to data compiled by Bloomberg. That compares with 73 percent of U.S. companies in the period.
RBS climbed 6.4 percent to 43.08 pence, rebounding from yesterday?s 2.9 percent slide. The U.K.?s biggest government- owned lender said earnings from its British retail and corporate banking division more than doubled to about 1 billion pounds ($1.6 billion) in the first quarter. The insurance unit, which owns Churchill and Direct Line, posted its first profit in five quarters.
?Strong Momentum?
?We are pleased to see the strong momentum? in the global banking and markets division and in insurance, said Atif Latif, an analyst at Guardian Stockbrokers in London.
ThyssenKrupp jumped 6.5 percent to 31.79 euros on plans to sell or spin off units representing about a quarter of its sales as it seeks to cut debt and focus on engineering.
Deutsche Lufthansa AG gained 4.6 percent to 15.35 euros after UBS AG upgraded Europe?s second-biggest airline to ?buy? from ?hold.?
Pandora A/S, the Danish jewelry chain, rallied 6.7 percent to 254 kroner, the biggest gain in the Stoxx 600, as HSBC Holdings Plc rated the shares ?overweight? in new coverage. The 31 percent decline from January this year presents a buying opportunity, HSBC analyst Sophie Dargnies wrote in a note today.
Belgacom lost 5.5 percent to 24.93 euros, an 11-month low. The largest telephone company in Belgium lowered its revenue and earnings forecasts after first-quarter sales fell more than analysts estimated because of lower mobile voice revenue and fixed-line losses.
DnB NOR ASA plunged 6.3 percent to 79.15 kroner as Norway?s biggest bank reported first-quarter net income of 2.85 billion kroner ($520 million), missing the 3.45 billion-krone average of 15 analyst estimates compiled by Bloomberg.
--With assistance from Francine Lacqua in London. Editor: Andrew Rummer
To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
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